Text-to-story visualization is challenging due to the need for consistent interaction among multiple characters across frames. Existing methods struggle with character consistency, leading to artifact generation and inaccurate dialogue rendering, which results in disjointed storytelling. In response, we introduce TaleDiffusion, a novel framework for generating multi-character stories with an iterative process, maintaining character consistency, and accurate dialogue assignment via postprocessing. Given a story, we use a pre-trained LLM to generate per-frame descriptions, character details, and dialogues via in-context learning, followed by a bounded attention-based per-box mask technique to control character interactions and minimize artifacts. We then apply an identity-consistent self-attention mechanism to ensure character consistency across frames and region-aware cross-attention for precise object placement. Dialogues are also rendered as bubbles and assigned to characters via CLIPSeg. Experimental results demonstrate that TaleDiffusion outperforms existing methods in consistency, noise reduction, and dialogue rendering.